JetBlue and Emirates Fined

In its latest enforcement moves the U.S. Department of Transportation (DOT) fined Dubai-based Emirates $100,000 for limiting compensation for lost, damaged and delayed baggage to less than consumers were entitled under an international treaty. The DOT also fined JetBlue Airways $50,000 for violating federal aviation laws and the DOT rules prohibiting deceptive price advertising in air travel.

“All air passengers, regardless of whether they are taking domestic or international flights, deserve to be compensated fairly for lost, damaged or delayed baggage,” DOT Secretary Ray LaHood said regarding the Emirates case. “We will continue to take enforcement action when necessary to protect airline consumers.”

Under the Montreal Convention, an international agreement that sets liability limits for international air transportation, airlines are liable for damages caused by lost, delayed or damaged baggage up to a limit that is the equivalent of approximately US$1,820 unless the carrier has taken all reasonable measures to prevent the damage or it was impossible to take these measures, DOT said of Emirates.

The Convention forbids carriers from setting a lower baggage compensation limit for international flights, and does not allow carriers to refuse to provide compensation for jewelry, electronics or other specific types of items. U.S. aviation statutes require airlines to comply with the Convention, the DOT said.

Based on a consumer complaint received by DOT, the Department’s Office of Aviation Enforcement and Proceedings investigated Emirates’ handling of baggage claims for flights to or from the United States and found numerous violations of the Montreal Convention, DOT said.

“In many cases, Emirates denied reimbursement for expensive items such as lost electronics, jewelry, and cameras. In its written responses to passengers, Emirates stated that its contract of carriage limited its liability for such items and incorrectly claimed that its practice complied with the Convention. Emirates’ website also stated that the carrier was not liable for valuables damaged while in the carrier’s custody. In addition, the carrier often provided limited or no compensation for costs related to delayed baggage while claiming in responses to passengers that limiting compensation was allowed by the Convention,” DOT said.

In the case of JetBlue the DOT reiterated its policy that when passengers shop for an airline ticket, they have a right to know the full price they will have to pay.

DOT’s LaHood said, “We expect airlines to treat their passengers fairly and will take enforcement action when our rules are violated.”

The DOT found that for a period of time in early 2011, JetBlue displayed fare advertisements on several websites that did not provide any information on additional taxes and fees.

“Consumers clicking on the advertisements were taken to a page where a list of routes and prices were displayed, along with a statement that taxes and fees would be added to the fare. However, the statement was not a link, and consumers had to scroll to the bottom of the page or click a link next to each of the listed fares to see, listed in fine print, the amount of the additional taxes and fees they would have to pay,” said the DOT.

JetBlue’s website violated DOT rules requiring any advertising that includes a price for air transportation to state the full price to be paid by the consumer, including all carrier-imposed surcharges, DOT said.

“The only exception currently allowed is government-imposed taxes and fees that are assessed on a per-passenger basis, such as passenger facility charges, which may be stated separately from the advertised fare but must be clearly disclosed in the advertisement so that passengers can easily determine the full price they must pay. Internet fare listings may disclose these separate taxes and fees through a prominent link next to the fare stating that government taxes and fees are extra, and the link must take the viewer directly to information where the type and amount of taxes and fees are displayed,” said the DOT.

Under DOT’s recently adopted consumer rule that seeks to enhance protections for air travelers, carriers will be required, among other things, to include all government taxes and fees in every advertised fare beginning Jan. 24, 2012.